Outsourcing Excellence Award – Best IT Apps – The Illinois State Toll Highway Authority and Unisys

In 2004 Illinois Governor Rod Blagojevich set a lofty goal for the Illinois Tollway: Say good-bye to long lines at tollbooths. The Tollway did not want its 1.3 million daily drivers waiting to pay tolls. Instead, the state Tollway system, which provides 274 miles of roadway throughout Northern Illinois, including linking Wisconsin to Indiana, wanted as many motorists as possible to pay their tolls at highway speeds while whizzing through its non-stop Open Road Tolling (ORT) lanes.

The only way to make this possible was to increase the use of the I-PASS, the Tollway’s electronic toll collection system. Today, the Tollway collects 80 percent of its toll payments from customers using I-PASS transponders, up from 35 percent in 2003. And almost half–48.35 percent–of its 2.5 million account holders use its online account management services–up from zero in 2003. Illinois drivers are now among the largest users of electronic toll collections in the US, reports Ted Young, Tollway CIO.

Before 2003, the Tollway did not have a retail venue. Drivers wanting to purchase an I-PASS transponder had to:

Physically drive to the Tollway’s headquarters and set up their accounts with the assistance of a customer service representative

Visit a mobile van at Illinois Tollway Oases, which are rest areas along the Tollway with fuel stations, restaurants, gift shops, and restrooms

Call a toll-free number and order one by mail

“It certainly wasn’t convenient for drivers to join the I-PASS program or access their account information because they were limited to the phone or physically walking into a building during business hours,” says McPartlin. “We needed a solution that would not only improve customer service, but also assist us in advancing our goal to reduce congestion on the Tollway so drivers can spend less time on the road and more time with their families.”

Young says the Tollway decided that an e-Commerce solution was the answer. “The Tollway needed a Web-based solution that allowed motorists to take care of their I-PASS account management themselves-anytime, any day,” says Richard Concaildi, the Unisys executive who manages the Tollway account. “We had to get them out of line and online.”

But Young’s staff did not have the infrastructure or capacity to do Web hosting, application development, interactive voice response (IVR), and project management services. “We decided to outsource so we could move as quickly as possible to implement a solution for our customers,” he recalls. He also realized it “would have been challenging” to set up the requisite Web hosting with the appropriate security in its existing data center.

Supplier Selection

Instead of letting the IT department define the requirements for its e-Commerce technology solution, the Tollway let customers’ needs determine the top-level requirements. Then the Tollway went through its normal procurement processes using a public Request for Proposal (RFP) process.

It evaluated 11 bidders. IT professionals were included on the committee at the Tollway that technically scored the proposals submitted. The review committee then looked at pricing for those that made the technical cut.

Being a state agency with its own governing board adds another level of complexity to the selection process. The Illinois Tollway Board of Directors, which has to approve all contracts, meets publicly. They discussed this contract in public sessions with the media attending. “The media asked just as many questions as our directors did,” says Young. “Government engagements are always under a microscope,” adds Concaildi.

The Tollway awarded the business to Unisys, which was “the lowest bidder with the highest technical merit,” says Young. “We had to identify the vision of senior management and translate them into realities,” says Concaildi. The Tollway and Unisys signed a five-year contract in 2003 for Unisys to develop and manage the Web-enabled I-PASS Online Account Management System.

The Transition Period Switches Gears into Mach Speed

Since Unisys had to create a new system, the partners “had to define business rules we had never considered before,” says Young. The cooperative effort began with ways to fulfill orders in the interim. “Unisys guided us, showing us what we needed to look at, given its history with various e-Commerce systems,” recalls the CIO.

The original RFP allowed nine months to add online transponder sales on the Web. But reality required Unisys to go from zero to 65.

First, the Tollway wanted to sell transponders online within 60 days. “Instead of throwing the contract in our face or coming up with a bunch of excuses, they told us they would do the best they could. Unisys got it done and they didn’t raise the price.”

Then, the Tollway contracted with a commercial retail partner, Jewel-Osco, to sell transponders at more than 200 storefront locations in Illinois, southern Wisconsin, and northwest Indiana. All of the transponders purchased at retail sales outlets had to be activated after purchase. Activation, however, was not part of the original RFP; it became a change order and the Web soon became the method of choice.

The traffic was “significantly higher than we had previously experienced,” says Young. “The end of 2004 and the beginning of 2005 saw daily transponder sales equal to annual transponder sales previously,” he reports.

Here’s what happened: to encourage transponder use and fund a multi-billion system-wide Capital Program, the Tollway announced it was raising tolls on January 1, 2005, including a doubling of passenger vehicle tolls from 40 to 80 cents for everyone who did not pay tolls electronically. Procrastinators waiting to switch just before the rate increase flocked online to activate their new I-PASS transponders. There was an influx of more than 300,000 purchases within two months of the toll rate increase. Suddenly the Unisys team had to meet a 1,200 percent increase in Web volume.

“Without online activation, I don’t think we would have survived those last months of 2004,” recalls Young. In November 2004 Unisys completed 7,000 activations online, the activity to skyrocketed to more than 94,000 online activations in December 2004 and more than 95,000 online activations in January 2005 before starting to level off in February with 18,000 online activations.

As a result it was critical that Unisys maintain a stable Web site during that time. “Keeping the Web site up was crucial because customers who couldn’t activate their transponders would have been forced to pay the higher toll. Unisys’s ability to meet our changing needs is where our positive relationship came from,” says Young.

At the same time, the Tollway’s call center “experienced extremely heavy volumes,” continues Young. Unisys created an automated phone message directing drivers to the Tollway’s Web site. “That made it all the more crucial for the site to stay up and running. It did just that throughout the crunch period,” Young reports.

When the Tollway outsourced to Unisys, online account management was not an option for I-PASS users. Today 1.4 million account holders go online to do so. Young says the Tollway had to upgrade the hosting infrastructure to handle this dramatic increase. “We made predictions about where we would be in a year or two and purchased the appropriate hardware and software proactively. But it was the partnership with Unisys that enabled us to meet the increased service demands,” says Young.

Concaildi says Unisys realized the importance of Web performance during this crunch time. “We gave this the highest quality control we could,” he notes.

Governance

Service level agreements require 99 percent uptime. Young says the real measure of success has been “meeting the needs of our customers.”

Business Benefits

Outsourcing has saved the Tollway money. It cost the Tollway $6.70 every time a driver called to purchase a transponder. Purchasing and activating online is “much more cost effective,” says Young

Having a user-friendly e-Commerce solution reduced the burden on the Tollway’s call center support. Today drivers can now handle standard tasks like address changes and credit card renewals on the Web. Young estimates having the site averted 1.96 million vehicle update requests and 850,000 calls to update credit cards from the call center.

The e-Commerce solution also saves money. Young says online activities have brought in $31 million.

Outsourcing also has allowed the Tollway to launch a new customer service allowing missed tolls to be paid online; Young believes the Tollway is the first in the United States to do this. Cash-paying drivers who don’t have change on the road can pay the toll online within seven days. During the program’s first 60 days, the Tollway collected 19,216 tolls totaling $34,000 in revenue. (People pay because cameras in the toll collection lanes can identify scofflaws by capturing a digital image of license plates.) “This saves us 30 cents per transaction for manual processing. This is found money,” notes Young.

Other new initiatives include support for vanity plates, and assistance with a new I-PASS account application that allows families and fleet users to maintain a single pre-paid toll balance for multiple transponders. “Some fleet users have 200 transponders, which made it very involved to get Tollway usage numbers before we added this feature,” says Concaildi. Unisys assisted the Tollway with significant changes to both the database back end and application front end.

“We get e-mails from our customers who tell us they like our Web site,” says Young. They like being able to access their accounts 24/7. The new, optimized Web site features “more space and power” so the Tollway can provide helpful online features such as maps, a toll calculator for easy road-trip planning, better construction updates, and video streams that more fully explain the benefits of Open Road Tolling. “Our communications group has a more robust way to share information with constituents,” says Young.

Finally, the Tollway’s IT staff “is free to focus on business planning rather than day-to-day IT support,” notes the CIO.

Why This Relationship Works

Unisys has a can-do attitude even under pressure. “They are willing to step up to the plate and get things done in the difficult timeframe,” say Young.

The partners have a good system for scope changes. “They define exactly what they are going to do and its price. If we don’t agree, we discuss it and they refine the statement of work,” says Young.

The same Unisys team that started with the Tollway is there still. Young says the personnel continuity is important.

Unisys is experienced in public-sector outsourcing and understands its nuances. “As a government agency, we need a partner who can help us be visionary to guarantee we always have choices in the face of procurement rules and financial limitations. Legislators, our customers, and the media scrutinize our relationship,” McPartlin says.

“We are both in it for the long haul and ready to do what it takes to ensure citizens get the services they need as the relationship moves forward,” says Young.

“We mutually see things from the other side of the desk,” adds Young. Concaildi was a CIO for a Fortune 50 company; he says he’s “able to see the Tollway’s needs through their eyes.”

Concaildi calls the Tollway’s executive leadership team “visionaries with common sense.”

Unisys and Tollway people regularly engage in spur-of-the-moment brainstorming sessions.

With Unisys’s support, the Illinois Tollway became the first Tollway in the United States to convert an outdated, barrier-style system of toll plazas to Open Road Tolling systemwide in less than two years. Young says ORT “makes life better for our citizens in countless ways, including reduced gas expenses and faster commutes.” With gas over $3 a gallon and time another valuable commodity, isn’t that where the rubber meets the road?

Lessons from the Outsourcing Journal:

Government outsourcing engagements are more complex than commercial ones because they include more public scrutiny. Government agencies need to work with seasoned suppliers that understand the government process.

When the buyer experienced a tsunami of demand, the supplier was able to ramp up and cope. Most in-house IT demands don’t have that kind of resource flexibility.

Outsourcing has reduced the burden on the Tollway’s call center, which is more costly to operate than letting drivers maintain their own accounts on the Web.

Outsourcing also allowed the Tollway to save money thanks to its new e-Commerce initiative.